Starting a business can be an exciting and rewarding experience, but it can also be challenging. To increase your chances of survival, here are 5 key considerations when starting a business in Australia.
In Australia, research shows that small businesses are an integral part of the economy, with around 2.4 million small businesses accounting for 97% of all businesses. However, starting a business in Australia can be tough, with around 60% of small businesses failing within the first three years.
If you’re looking to get a new venture off the ground, keep reading to learn how to set yourself up for success.
#1 – Business planning
It’s essential to have a solid business plan that outlines your goals, target market, competition, and financial projections if you don’t want to end up another failed small business statistic.
According to a report by the Australian Bureau of Statistics, only 50% of small businesses survive beyond their first three years. Poor strategic management is one of the leading causes of small business failure, with around 44% of small businesses failing due to poor business planning.
#2 – Financial management
Managing your finances effectively is crucial for the success of your business. It’s important to have a budget, regularly monitor your cash flow, and have a plan in place to manage your finances during slow periods.
According to a report by Xero, cash flow problems are one of the main reasons why small businesses fail in Australia. The report found that 60% of small businesses experience cash flow problems, with 50% of those businesses struggling to pay their bills on time.
#3 – Marketing
Marketing is essential for attracting and retaining customers. In 2023 and beyond, all small businesses must have a strong online presence, including a website and social media accounts, to reach your target audience effectively.
According to a report by Sensis, around 60% of small businesses in Australia have a website, and 34% use social media for marketing. However, the report also found that 31% of small businesses do not have a website, and 44% do not use social media for marketing.
#4 – Legal considerations
Starting a business comes with various legal considerations, including business structure, contracts, and intellectual property. According to a report by the Australian Securities and Investments Commission, around 12% of small businesses in Australia have experienced legal issues.
Therefore, all small business owners ought to seek legal advice to ensure their business complies with all relevant laws and regulations before they open their doors.
#5 – Payroll management
Managing payroll is crucial for ensuring your employees are paid accurately and on time. According to a report by Xero, around 44% of small businesses in Australia find managing payroll to be one of the most challenging aspects of running a business. Investing in a reliable payroll system can help simplify the process and ensure compliance with tax and superannuation obligations.
Starting a business can be challenging, but by considering these 5 key areas, you can increase your chances of making it past the first twelve months, and beyond! By having a solid business plan, managing your finances effectively, marketing your business, complying with legal requirements, and investing in a reliable payroll system, you can set your business up for success.